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On Corporate Tax Asymmetries and Neutrality

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Author Info
Paolo Panteghini

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Abstract

This article discusses the effects of corporate tax asymmetries under investment irreversibility. We introduce a tax scheme where the tax base is given by the firm's return net of a rate of relief. When the firm's return is less than the imputation rate, however, no tax refunds are allowed. Unlike symmetric tax systems, the scheme proposed is neutral with respect not only to income uncertainty but also to policy uncertainty. Copyright Verein fü Socialpolitik and Blackwell Publishers Ltd 2001.

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File URL: http://www.blackwell-synergy.com/doi/abs/10.1111/1468-0475.00038
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Publisher Info
Article provided by Blackwell Publishing in its journal German Economic Review.

Volume (Year): 2 (2001)
Issue (Month): 3 (08)
Pages: 269-286
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Handle: RePEc:bla:germec:v:2:y:2001:i:3:p:269-286

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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  4. Jack Mintz, 1995. "Corporation tax: a survey," Fiscal Studies, Institute for Fiscal Studies, vol. 16(4), pages 23-68, November. [Downloadable!]
  5. Luis H. R. Alvarez & Vesa Kanniainen, 1997. "Valuation of Irreversible Entry Options under Uncertainty and Taxation," CESifo Working Paper Series CESifo Working Paper No. , CESifo Group Munich.
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  9. Sandmo, Agnar, 1979. "A note on the neutrality of the cash flow corporation tax," Economics Letters, Elsevier, vol. 4(2), pages 173-176. [Downloadable!] (restricted)
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  13. Aizenman, Joshua, 1998. "New Activities, the Welfare Cost of Uncertainty and Investment Policies," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 3(2), pages 97-110, April. [Downloadable!] (restricted)
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  21. Pennings, Enrico, 2000. "Taxes and stimuli of investment under uncertainty," European Economic Review, Elsevier, vol. 44(2), pages 383-391, February. [Downloadable!] (restricted)
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  24. Fane, G., 1987. "Neutral taxation under uncertainty," Journal of Public Economics, Elsevier, vol. 33(1), pages 95-105, June. [Downloadable!] (restricted)
  25. Dotsey, Michael, 1990. "The Economic Effects of Production Taxes in a Stochastic Growth Model," American Economic Review, American Economic Association, vol. 80(5), pages 1168-82, December. [Downloadable!] (restricted)
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  28. Pindyck, Robert S, 1988. "Irreversible Investment, Capacity Choice, and the Value of the Firm," American Economic Review, American Economic Association, vol. 78(5), pages 969-85, December. [Downloadable!] (restricted)
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Paolo Panteghini, 2002. "Asymmetric Taxation under Incremental and Sequential Investment," CESifo Working Paper Series CESifo Working Paper No. , CESifo Group Munich. [Downloadable!]
    Other versions:
  2. Paolo Panteghini, 2002. "Endogenous Timing and the Taxation of Discrete Investment Choices," CESifo Working Paper Series CESifo Working Paper No. , CESifo Group Munich. [Downloadable!]
  3. Paolo Panteghini, 2001. "Corporate Tax Asymmetries under Investment Irreversibility," CESifo Working Paper Series CESifo Working Paper No. , CESifo Group Munich. [Downloadable!]
    Other versions:
  4. Vesa Kanniainen & Paolo M. Panteghini, 2008. "Tax Neutrality: Illusion or Reality? The Case of Entrepreneurship," Working Papers 0803, University of Brescia, Department of Economics. [Downloadable!]
    Other versions:
  5. Rainer Niemann, 2007. "The Impact of Tax Uncertainty on Irreversible Investment," CESifo Working Paper Series CESifo Working Paper No. , CESifo Group Munich. [Downloadable!]
  6. Luis H. R. Alvarez & Erkki Koskela, 2005. "Progressive Taxation and Irreversible Investment under Uncertainty," CESifo Working Paper Series CESifo Working Paper No. , CESifo Group Munich. [Downloadable!]
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